Housing market rebounding?

by David Weissman, Special to the Citizen

06/14/12

Laura Lafayette

The housing market in Henrico and metro Richmond area appears to be headed in the only direction it could go -- up. That was the general consensus of attendees at the Richmond Association for Business Economics’ luncheon last month at the Federal Reserve Bank of Richmond, following a presentation by Richmond Association of Realtors CEO Laura Lafayette.

“What I took away, and what I think [everyone else is] taking away as well is the real estate market has really bottomed out in the Richmond region,” said RABE president Charles Kennington. “And going forward, we’re going to see more good news than bad news.”

The numbers showed that the units sold in Virginia declined every year from 2005-2010, with last year showing the first signs of improvement (slightly more than 11,000 in 2011 compared to about 10,600 in 2010).

Lafayette pointed out that, while the units sold rebounded slightly in 2011, each county saw a significant drop-off in average selling price. Henrico witnessed the biggest decrease, with units selling at an average of $230,823 in 2011 compared to $250,535 in 2010, a decrease of nearly 8 percent.

While her overall comments were encouraging, Lafayette warned that the number of units sold in 2005 (just more than 20,000) was probably more than the Richmond area could maintain, adding that 2007 totals (about 15,800 units) were a more attainable goal.

“We’re just looking for the market to behave normally,” she said, “not take off.”

Henrico did rate better than the other counties in other categories, though, such as active listings (1,275 as of May 20), sold vs. listed percentage (60 percent) and average sales per month (245). Henrico also rated well in average days on market (DOM), with 70 the current average for May 2012.

Lafayette, though, told attendees not to pay attention to DOM because real estate agents “can be creative.” An agent can re-list a house by taking the property off the market for a couple hours and putting it back on. This process gives the property a new Multiple Listing Service (MLS) number and resets the DOM.

Lafayette stressed the significance of the average list price of newly constructed homes compared to that of resold homes (those built since 2006). New homes in Henrico were listed, on average, for $375,926 compared to $348, 937 for resold homes. Other counties saw an even larger difference.

“We need to get resale price closer to new price,” Lafayette said.

The big difference is scaring off potential new-home buyers because of the appearance that their investment almost immediately loses value, she said.

Nationally, the housing market had its best first quarter in five years, and foreclosures are down significantly, she said. In Virginia, the percentage of units sold has been up every month except for March, though Lafayette said she wasn’t concerned about the change (about half a percent).

There is a concern, though, that the good numbers for January and February may cause a softening in May and June, normally the highest selling months, she said.

There is a stubbornness on the part of some “boomers” to not sell their properties now because they’re bitter about the fact that they could have sold them for more years ago, she said.

“People’s 401k has become their 201k,” she joked.

RABE has about eight to 10 regular luncheons each year on topics relevant to the Richmond community, Kennington said.

“Clearly, real estate, having suffered the downturn that it did, is something we think is on the minds of our members and the public at large,” he said.

“When we reached out to Laura, we didn’t know what her message was going to be. So, whether it was good or bad, we just want to see what the facts are to inform our membership.”

The 10th Annual Filipino Festival will be held Aug. 7-8 at Our Lady of Lourdes Church, 8200 Woodman Rd., beginning with opening ceremonies at 5 p.m. Friday and continuing with live entertainment, food and exhibits until 10 p.m. On Saturday the festival will take place from 10 a.m. to 10 p.m. with a full schedule of performances featuring traditional Filipino dance, music and song.

Filipino cuisine, including BBQ, pansit, lumpia, adobo, halo-halo, lechon, empanada and leche flan, will be available for purchase. The festival will also feature a children's area, church tours, exhibits, and health screenings. > Read more.

The Children’s Museum of Richmond last week opened its new Short Pump location at Short Pump Town Center, to the delight of children who attended a sneak preview of the location July 10. The new facility, located under the forthcoming LL Bean store (formerly the food court) is 8,500 square feet in size – much larger than CMoR’s former Short Pump location at West Broad Village, which opened in 2010. The new space includes The CarMax Foundation Service Station, the Silver Diner, a grocery store, a performance stage and an art studio, as well as a giant Light Bright Wall. > Read more.

The Virginia Hispanic Chamber of Commerce and Henrico Police are both presenting community events tomorrow, Aug. 1. The Feria Community Resource Fair at Richmond International Raceway brings together community service providers, embassies/consulates from Latin American countries, government agencies, nonprofit organizations and corporations that impact the Latino community. The Division of Police’s Community Day will feature demonstrations and displays from police, fire, animal protection and sheriff’s office, as well as family activities, food, entertainment and more. Other events this weekend include wine, chess and theatre! For all our top picks this weekend, click here! > Read more.